Best Ways to Invest 20k for Short Term in Nigeria

Best Ways to 20k for Short Term in Nigeria
Best Ways to 20k for Short Term in Nigeria

In a world that’s driven by economic movements, identifying the best ways to invest 20k for the short term is critical, particularly in countries with growing economies like Nigeria. Increasing your wealth doesn’t necessarily require large capital.

For anyone looking to maximize their financial growth potential in Nigeria, it’s important to understand and explore the best way to invest 20k short term. Whether you are an entrepreneur, a student, or just a proactive individual with a small saving plan, making the right investment choice can be a game-changer for your financial health. 

In a volatile economic environment, securing your money is paramount but equally significant is seeking avenues for your funds to generate added value. Investing in short-term vehicles allows you not just to safeguard your capital but to grow it simultaneously. 

This article explores some of the best ways you can smartly and safely invest 20,000 Naira for a short term in Nigeria and start on a path of financial stability and success.

Join us as we delve into this interesting world of profitable opportunities in the dynamic Nigerian economy.

Take time to read through TransferXO’s list of – Where to Invest Money in Nigeria With Less Risk

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Understanding Short-Term Investments

Short-term investments, often known as marketable securities or temporary investments, are investments that can be quickly converted into cash, typically within five years. They differ significantly from long-term investments. Understanding what sets short-term investments apart can aid potential investors in making informed choices.

When one hears the term investment, long-term stocks, bonds, and real estate might be the first things that come to mind. These long-term options tend to hold funds for five years or more and typically aim to yield substantial returns over time. In contrast, short-term investments serve different purposes.

Short-term investments can help an investor retain their capital while also earning a small profit. For businesses, it allows them to utilize extra cash to earn additional profit instead of having the funds idle. Additionally, due to their nature of turning quickly into cash, these investments present less risk of losing value.

Investors, however, need to consider the time frame involved in these short-term investment options. They can be classified into three main groups, each with its own duration:

  • Very short-term investments are those held for less than a year. This category typically includes cash, checking accounts, savings accounts, and money market accounts. Treasury bills and short-term certificates of deposits (CDs) also fall under this category.
  • Short-term investments typically hold your funds for one to three years. This group can include short-term bond funds, short-term municipal bond funds, peer-to-peer lending, and certain robo-advisor portfolios.
  • Mid-term investments, held for three to five years, include specific types of bonds, index funds, and certain exchange-traded funds (ETFs).

Remember, the timeframe for each investment category may vary, and investors should be ready to adjust based on the market’s current situation and future outlook. 

Short-term investments can provide an effective way to build wealth incrementally without high risks tied to the volatile market. They serve as an excellent alternative for investors seeking safety and returns in a shorter duration.

Check Out the TransferXO’s Guide on – Investment With Monthly Returns in Nigeria | TransferXO Guide

Top 10 Best Ways to Invest 20k for Short Term in Nigeria

Investing your money is one of the surest ways to increase your financial security and independence. However, making the right investment decision can be a daunting task. Nigeria, like other countries, provides various short-term investment options to explore, especially with a budget of 20k

Here are the top 10 ways to invest that sum for a short-term benefit:

1. Cryptocurrencies

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Buy Cryptocurrency on TransferXO

Investing in cryptocurrencies has become an increasingly popular way to grow your capital in Nigeria. With a 20k investment, the short-term prospects can be substantial, considering the recent positive trend in crypto markets and the presence of a bull run. 

This modern investment opportunity allows you to take advantage of market volatility to achieve potential quick gains. When trading cryptocurrencies, choosing the right platform is crucial. 

Among the best in Nigeria is TransferXO, known for its intuitive interface, high-level security, and user-friendly experience. Aside from these features, it also offers fast transactions and competitive fees, making it ideal for both seasoned traders and beginners. 

The platform supports various cryptocurrencies, providing numerous options to investors. TransferXO’s features and efficiency thus make it an excellent choice for short-term crypto trading in Nigeria.

It’s possible to earn in crypto without investment, check out how by reading – How to Earn Money in Crypto without Investment in 10 Ways

2. Money Market Funds


Money market funds are a type of mutual fund that provides investors with the opportunity to invest in low-risk and highly liquid short-term securities such as treasury bills, commercial papers, and certificates of deposit. 

In Nigeria, these funds have become popular due to their attractive interest rates and high level of safety. When you invest 20k into a money market fund, it is pooled together with money from other investors to purchase these securities. 

This gives you the benefit of professional fund management, diversification, and liquidity. Your returns are earned as dividends, which are usually higher than the interest rates of savings accounts. The risk of loss in money market funds is extremely low, making it suitable for short-term investments.

3. Invest With a Robo-Advisor 

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For those looking to invest 20k in the short term within Nigeria, leveraging a robo-advisor presents a unique and efficient opportunity. Unlike traditional investment methods, robo-advisors utilize algorithms to manage investments, minimizing human error and reducing fees. 

This technology-driven approach offers personalized investment strategies tailored to individual financial goals and risk tolerances, ensuring your money is placed in opportunities suited to short-term growth.

Moreover, the accessibility and convenience of robo-advisors cannot be understated. With a few clicks, investors can set up their accounts, transfer their 20k, and let the algorithm do its magic, optimizing portfolios in real-time and adjusting to market changes. 

This makes it an ideal choice for beginners or those without the time to deeply understand the complexities of financial markets. For Nigerians looking for an innovative, cost-effective, and hands-off approach to short-term investing, a robo-advisor is a compelling avenue worth exploring.

4. Peer-to-Peer Lending

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Investing in Peer-to-peer (P2P) lending has become an appealing short-term investment option in Nigeria. In P2P lending, you act as a lender to individuals or small businesses in need of loans. 

You’ll register with an online P2P platform like FINT, FundQuest, or QuickCheck, where you can review loan requests and choose who to lend to. This process does come with some risk, as the borrower could default on their loan. 

However, with interest rates often ranging from 12%-30%, P2P lending could bring significant returns on your 20k investment in a short period, especially when you spread your investment across multiple borrowers to reduce risk.

5. Certificate of Deposit (CD)

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A Certificate of Deposit (CD) is another viable short-term investment strategy in Nigeria. It is a time-bound deposit made with banks or financial institutions. 

The primary advantage of CDs is their predictable return rate. When you invest your 20k in a CD, the bank promises to pay a fixed interest rate over a specific period. At the end of this period, you receive your initial deposit plus the promised interest. 

Interest rates for CDs vary across Nigerian banks but often offer higher rates than a traditional savings account. It’s a safer short-term investment option as it’s insured, guaranteeing that you’ll get your money back, plus interest, regardless of what happens to the bank.

6.  Cash Management Accounts 

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Investing 20k in Nigeria for short-term gains requires a strategy that balances risk with accessibility. Among various options, Cash Management Accounts (CMAs) emerge as a standout choice for investors. Designed to maximize the returns on idle cash, CMAs combine the benefits of savings and investment accounts, offering higher interest rates compared to traditional savings accounts without sacrificing liquidity.

For short-term investors in Nigeria, this flexibility is crucial. It means having immediate access to funds for unforeseen expenses or seizing other investment opportunities that arise. 

Furthermore, CMAs often come with added perks such as free transfers, minimal transaction fees, and easy account management through digital platforms. This blend of convenience, efficiency, and profitability makes CMAs an excellent vehicle for Nigerians looking to grow their ₦20,000 smartly and securely in the short term.

7. Dividend Stocks 

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For those willing to dip their toes into the stock market, dividend stocks present an exciting investment avenue. Dividend stocks are shares in companies that regularly pay out a portion of their profits to shareholders. 

By investing in such stocks, you receive regular payments (dividends), thus ensuring a consistent income stream in addition to potential capital appreciation. With an investment of 20k, investing in these types of stocks could yield impressive returns, depending on the performance of the selected companies. 

It’s a rewarding option for short-term investors in Nigeria who are willing to understand and manage the risks involved. Please do thorough research or engage the services of a financial adviser to make informed decisions.

8. Stock Trading

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Stock trading is a highly attractive investment avenue, particularly if you have a short-term goal in mind. In Nigeria, the Nigerian Stock Exchange (NSE) offers a platform for buying and selling shares of publicly quoted companies. 

With 20k, you can purchase a significant number of shares depending on the current share price of the company you choose. This type of investment involves purchasing shares when prices are low and selling them off when they have increased significantly to realize your gains. 

It’s a risk-driven approach but has a higher profit potential. Be prepared to stay vigilant in monitoring market trends, as short-term stock trading can be affected by economic, political, and company-specific news.

9. Short-Term Government Securities

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Investing in short-term government securities is a highly recommended strategy for individuals seeking a safe and profitable way to invest NGN 20k in Nigeria over the short term. Nigerian Treasury Bills (NTBs) and Government Bonds are exemplary choices for investors aiming for secure returns without the risks associated with the stock market or other volatile investments. 

These securities are essentially loans made by investors to the government, with the promise of repayment at a specified interest rate after a short period, typically a few months to a year.

The appeal of these government securities lies in their government backing, making them virtually risk-free in terms of default. Furthermore, they offer competitive interest rates compared to regular savings accounts, providing an efficient way to grow your investment within a short time frame. 

Additionally, the liquidity of these investments allows investors easy access to their funds after maturity, making them an ideal choice for those looking for a combination of safety, profitability, and flexibility in their investment options in Nigeria.

10. High-Yield Savings Accounts

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If you want to invest 20k in a secure and simple method, a high-yield savings account could be the way to go. A high-yield savings account is just like a regular one. However, it offers a greater interest rate, allowing you to make more money over time.

However, unlike other investing options, you will not lose money due to market changes. Furthermore, high-yield savings accounts are FDIC-guaranteed, which means the federal government will cover your funds up to $250,000 per depositor, per insured bank.

This is why high-yield savings accounts are a popular option for short-term investing. They are a low-risk, low-stress option to generate interest without committing your money for an extended period.

Read through the – Top 15 Companies to Invest in Nigeria | 2024 Investor Tips for an informed decision.

How to Choose the Right Investment Options 

Investing can be frightening, especially if you’re just starting. There are a wealth of investment options available, ranging from traditional stock markets to newer alternatives like cryptocurrency. Choosing the right investment options can make a significant difference to your financial future. 

So, how can you know which to choose? Here are a few steps you should follow:

1. Determine your investment goals

What is the purpose of your investment? Are you saving for retirement, for a child’s education, to buy a house, or just for wealth accumulation? Your goal will greatly influence your investment strategy and choice. For instance, if you’re saving for retirement, you might consider a long-term investment with a low risk. However, if your goal is to quickly accumulate wealth, you might take on more risky investments.

2. Understand your risk tolerance

Before you choose an investment, it’s crucial to understand how much risk you’re comfortable with. Do you prefer to play it safe with investments that offer steady, predictable returns? Or are you comfortable with taking more risk in exchange for potentially higher returns? There’s no right or wrong answer here – it’s a very personal decision.

3. Consider the time horizon

Time is an important factor in investing. Generally, the longer your investment horizon, the more risk you can afford to take. That’s because you have more time to recover from any potential losses. If your goal is to make money quickly, however, your options might be more limited and may require taking on higher risk.

4. Do your research

Knowledge is power when it comes to investing. Before making a decision, you should conduct a thorough study. Understand the history of the investment, what factors may influence its performance, and how it fits with your investment strategy and goals. Never invest in anything you don’t completely comprehend.

5. Seek professional advice

If you are not confident in making investment decisions on your own, don’t hesitate to seek professional advice. Financial advisers and wealth managers can provide guidance and help you select the investment options that are best for you.

Remember, investing is not about getting rich quickly. It’s about strategically building your wealth over time. So, be patient, stick to your plan, and always keep your financial goals in mind

You can also read – 21 Legit Online Investment Platforms in Nigeria That Pays Daily | 2023

Maximizing Returns From Your Short-Term Investments

When it comes to investing, long-term investment plans typically hog the spotlight. It’s easy to see why: long-term investments offer the potential for significant gains over several years, and they generally involve lower risks than their short-term counterparts. 

However, short-term investments shouldn’t be underestimated or overlooked; they can offer a unique blend of speed, flexibility, and financial return.

But how can you ensure that you’re maximizing the returns from your short-term investments? Here are some key strategies.

1. Understand the Market

Before you decide to venture into short-term investments, take time to understand the dynamics of the financial markets. Know what drives fluctuations in stock prices and how various economic factors affect the financial market. Equip yourself with the knowledge of when it is best to buy and when to sell.

2. Diversify

Like any other type of investment, short-term investing should also be diversified. This simply means spreading your investments across various financial assets and not putting all your eggs in one basket. Diversifying reduces risk and potentially increases your chances of high returns.

3. Choose Investments Carefully

Investing in blue-chip companies and well-performing sectors could yield promising results in a short time. Don’t get lured by companies with big promises but no historical data of solid performance. Additionally, consider investments that allow you the flexibility of exiting easily if the need arises.

4. Set Your Financial Goals

One major key to successful short-term investing is setting financial goals. Determine how much profit you want to make from your investments. Your investment strategy will depend greatly on whether you’re looking for steady income or quick profits.

5. Use Stop-Loss Orders

This is a particularly handy tool for short-term traders. A stop-loss order can help protect your investment by automatically selling a security when it falls to a certain price, thus preventing significant losses.

6. Keep Track of Your Investments

Keep a close watch on the financial news and your portfolio. Timely analysis of market trends can be the difference between a profitable trade and a loss.

7. Reinvest

Don’t get caught in the trap of splurging all the returns from a successful short-term investment. A smart investor knows to reinvest the profits to grow wealth over time.

Maximizing returns on short-term investments takes knowledge, patience, and diligence. In the ever-fluctuating market, being proactive and smart with your investment decisions is essential. Don’t shy away from consulting professionals or seeking financial advice if you are unsure. 

Check Out the – 13 Proven Ways To Make Money Online in Nigeria Without Investment

What are the Risks Associated with Short-Term Investments in Nigeria?

Investing in the financial markets always comes with certain inherent risks and when the markets are volatile, as they often are in Nigeria, these risks are more pronounced. 

Whether you’re considering treasury bills, bonds, or stocks as your preferred short-term investment vehicles in Nigeria, it’s important to be aware of the associated risks. Here are some of them:

  1. Market Volatility: This is one of the most significant risks associated with short-term investments. Changes in interest rates, inflation rates, and political and economic policies can create unpredictability in the market and can cause investments to depreciate rapidly.
  1. Currency Risk: Since Nigeria has a fluctuating currency market, there is a significant risk associated with the devaluation of the Naira. Investors might lose a substantial part of their investment when the currency loses value.
  1. Economic Risk: This risk is connected to the health of the Nigerian economy. Political instability, corruption, oil price fluctuations, and fiscal policy changes can all influence economic conditions and negatively affect the performance of short-term investments.
  1. Inflation Risk: Inflation erodes the purchasing power of your returns. If the inflation rate is higher than the rate of return on your investment, you might lose value on your investment. Nigeria’s high inflation rate often poses this risk.
  1. Liquidity Risk: Certain short-term investments might not be easy to convert into cash without losing some initial investment. This can happen if there is a sudden need for cash or a rapid shift in market conditions.
  1. Regulatory Risk: Sometimes, the government can introduce new laws or regulations that can negatively impact the performance of your investment.
  1. Credit Risk: This is especially a concern with corporate bonds. The risk is that the company issuing the bond may not be able to pay back the investment or interest.

These risks don’t mean one should shy away from short-term investments in Nigeria. Instead, an investor should weigh these risks against their financial goals and risk tolerance.

Don’t miss out to read – Top 10+ Legit Investment Companies In Nigeria (Updated 2024)

Understanding Tax Implications

The tax implications of your short-term investments are crucial in planning your financial future. Short-term investments are typically held for one year or less, and any income gained from these is subject to tax. 

Profits from such investments are categorized as short-term capital gains and taxed according to your regular income tax rate. 

These tax rates can vary from 10% to 37% based on your taxable income. Some short-term investments, such as interest income or dividends, may be taxed differently. Before you invest, it’s crucial to understand these implications. 

An efficient investment strategy takes into consideration not only the returns but also the tax implications. Consult with a tax advisor to plan your short-term investments and make the most of your earnings.


The key to a profitable short-term investment of 20k in Nigeria depends on wise decisions, strategic planning, and a strong understanding of the current market trends. Opting for ventures such as treasury bills, commercial papers, fixed deposits, mutual funds, and bonds offers robust and low-risk returns. 

Diversifying the investment portfolio also cushions potential financial losses. Additionally, seeking financial advice from professionals aids in better managing the risks associated with each type of investment. 

Despite the diverse opportunities, the investor’s personal risk appetite, the initial investment, and financial goals should remain paramount.

Frequently Asked Questions 

Is investing 20k enough for short-term investments?

20k is a significant amount to invest in Nigeria. How much profit you can make depends on the kind of investment you decide on and market fluctuations.

What are some common mistakes to avoid when investing in Nigeria?

Common mistakes include not researching the investment properly, not considering your risk tolerance, and putting all your money into one investment. Diversification is a crucial element in minimizing risks in investment.

What should I look out for before investing?

Before investing, it’s crucial to conduct thorough research about the investment platform and understand the terms and conditions, potential returns, and risks involved. It’s also recommended to invest in areas or industries that you are familiar with.

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